Words matter -- and in the case of.....>

US TSY/RECAP: Words matter -- and in the case of the Jan FOMC it's the addition

of "further" to gradual hikes that hammered rates later in session.

- Earlier the DXY turned negative (-.120 to 89.596) briefly post-auction, adding

to Tsy sell-off/extending session lows in long end, short end reversing initial

gains. The 5-Year auction stopped on the screws, and dealer take up edged

higher, as the cover ratio softened. 

- Post initial reaction to the minutes saw a bid in the short end on a large

Block buy of +14.6k TUH at 106-16. 

- Sources reported heavy long end selling/futures and cash post-minutes, from

banks, props, real$, stops triggered as well w/30Y yld tapping 3.2314% in late

trade, revisiting Jun '15 highs; 10Y taps 2.9537% level not see since late Dec

'13.

- Heavy roll volume in futures from March to June ahead next wk Wed's first

notice date (June futures go "top step" on Feb 28). Heavy Eurodollar futures

selling, rate hike% climbs >75% for second hike at Jun FOMC.

- T-Notes last at 120.04, 10-Year yield last 2.950%.